assignment

Assignment is the foundation of the debt-buying industry, and the industry is built on sand. Or a swamp. Because assignment is also the industry’s weak spot, and the reason why most—if not all—debt-buyer lawsuits should fail.

Debt buyers must prove they have the right to collect a debt. To do this, it must show an unbroken, valid chain of assignment back to the original creditor. Most debt buyers cannot do this.

Today, the Massachusetts Supreme Court decided that if Wells Fargo and US Bank couldn’t keep track of their property, the court wasn’t going to help them take that property away from the consumers living in it. In other words, the “produce the note” strategy not only works, it is the law. At least in Massachusetts.

This decision could spill over into other states, since the foreclosure process in Massachusetts is similar to other states that permit non-judicial foreclosure. Besides, taking property without competent evidence kind of flies in the face of the Due Process Clause.

The Massachusetts court did point a way forward for the banks: valid assignments. Well, obviously. Unfortunately, the court also said the banks cannot go back and get retroactive assignments, so banks that kept similarly shoddy paperwork may be SOL for the mortgages they think they hold now.

Of course, my guess is that, rather than adopt the court’s reasonable, legal suggestion, the banks will spend millions of dollars lobbying Congress to overturn the Due Process Clause, or something.